Conservative and Libertarian

I was a bit mystified when George Osborne, in an otherwise splendid defence of capitalism today, said this:

"We are a Conservative Party not a libertarian party. As both I and David Cameron have argued, Conservatives have always understood the limitations of free markets on their own. We understand that unless markets are embedded in strong institutions, laws and cultural norms they can become free-for-alls that are prone to instability and end up benefiting the powerful at the expense of the needy.  Indeed, many of the problems we face today have been exacerbated by the weakening of many of those institutions – not least the Bank of England."

I was mystified because this is not a critique of any libertarianism I recognize.  Every libertarian I know not just recognizes the need for but insists on the important role of institutions, laws and cultural norms in preserving freedom (and it recognizes these collectively as the Rule of Law).  As I have argued elsewhere, for example, if we are to enjoy our liberty, we must acknowledge property rights, which in turn requires institutions that protect those property rights from abuse - and that entails laws and courts, as well as the social norms against stealing.  It is not libertarians who disdain institutions, laws and cultural norms, but anarchists.

For example, here are libertarian theorist Tibor Machin's most "basic tenets of libertarianism:" 

1. Adult human beings (and children derivatively and with proper adjustments) are sovereign over their lives, actions, and belongings. They have rights, among others, to life, liberty, and property.
2. Human beings have the responsibility in their communities to respect and act in recognition of this fact when dealing with others.
3. Human beings ought to develop institutions that ensure the protection of their sovereignty, delegating the required powers to agents (governments or the equivalent) for that purpose.
4. Such delegation of powers must occur without the violation of sovereignty or individual rights.
5. The agencies to which the power of protecting rights is delegated must exercise this power for the sole purpose of protecting those rights.
6. All concerns, including the protection of individual rights, must be acted on by members of communities without violating those rights.

Most Conservatives today would agree with all or most of those tenets.  It is actually a very old strand of small-c conservative thought that starts from a different set of tenets, to do with natural orders and ordained hierarchies, but I do not think many Conservatives today believe in the class system as the fundamental basis of social order (no doubt Viscount Crouchback will differ in the comments).  Yet the tenets as here described recognize the need for an institutional and legal framework that protects against force, fraud, theft and breach of contract, which are the problems I suspect Mr Osborne is alluding to in his reference to "free-for alls."  So there is no contradiction between libertarianism and a disciplined market.

Now consider whence the actual weakenings of the institutions Mr Osborne rightly derides originated.  Government action, by accruing to itself or to statute the powers previously exercised by institutions or cultural norms, generally weakens the Rule of Law.  This is why Conservatives should be - and are - annoyed at excessive government.  When you see the ludicrous spectacle of a boy who turned in a phone he had found to a police station being arrested for "theft by finding," it is quite clear that those in a position of authority have culpably eroded the institution of the police and the associated social norms.

[As an aside, there is therefore an argument to be made that libertarians should not approve of, for example, the loosening of divorce laws as happened in the 1960s.  It is hard to contend, I would suggest, that the weakening of the institution of marriage has not led to an expansion of state power over the raising of children that has adversely affected individual rights for all.  It is perfectly possible to have a fully functioning country with strong social institutions and vibrant markets existing with barely any state supervision.  Indeed, this was the case with England until less than a century ago, as AJP Taylor pointed out:

Until August 1914 a sensible, law-abiding Englishman could pass through life and hardly notice the existence of the state, beyond the post office and the policeman. He could live where he liked and as he liked. He had no official number or identity card.... [B]roadly speaking, the state acted only to help those who could not help themselves. It left the adult citizen alone.

If that's not conservative and libertarian at the same time, I don't know what is. End aside.]

So I would suggest Mr Osborne refocus his criticisms elsewhere.  It is not libertarianism that got us into this mess.  The current crisis represents the failure of the "mixed economy," of the Third Way attempt to allow private profits but socialised losses, all overseen by a regulatory, intrusive but utterly inefficient state.  That has proved to be a far greater enemy to national prosperity than libertarianism.